Developer Classification Readiness
Classification is coming. The question is where you'll land.
The law has not passed. Everything below is reported as a government announcement, not a final requirement. This page is updated as the position changes.
The Housing Ministry has announced it is preparing a law to establish a Real Estate Developers Union, with clear criteria for membership intended to ensure it admits only serious companies capable of executing their projects and meeting their obligations to buyers.
Reported controls include developer classification and a minimum project area. Companies that enter classification with an organised financial file will be graded above companies of identical size with a disorganised one. That gap is the only variable still under your control.
Where most companies are exposed
Obligations that don't show clearly in the accounts
The deferred-cheque portfolio against sold-but-undelivered units is, in substance, a delivery obligation set against deferred collection. Any assessor looks at that gap first.
Revenue recognised on delivery
Reported results reflect sales made three to four years ago, not current demand. A company can look profitable while running a liquidity gap — and the reverse.
No project-level cash model
Many developers manage liquidity at company level, and so cannot demonstrate that each project covers its own obligations from its own collections.
Instalment tenor mismatched to the cost curve
Extended payment plans against rising construction costs. This is the gap that becomes a delivery delay.
The readiness assessment
- 01
Financial position review
Statements, actual and contingent obligations, capital structure, collections portfolio.
- 02
Receivables portfolio analysis
Deferred cheques classified by date, project and risk grade, with the collection curve set against the cost curve per project.
- 03
Delivery record review
Delivered, committed and delayed projects, documented presentably.
- 04
Obligation coverage testing
Stress scenarios for slower collection, higher costs, delayed delivery.
- 05
Gap closure plan
What to fix, in what order, on what timeline, before applications open.
Deliverables
- Scored readiness report
- Receivables analysis by project and date
- Project-level cash flow model (editable)
- Stress test results
- Prioritised action plan
- Timeline
- —
- Investment range
- —
Where would an assessor stop reading?
0 of 12
The law has not passed and the criteria have not been published. These twelve points are what classification regimes generally examine — financial capacity, delivery record, and coverage of existing obligations. They are not statutory criteria.
- Do you model cash at project level, not company level?
- Is the deferred-cheque portfolio classified by date, project and risk?
- Can you show the collection curve against the cost curve per project?
- Are delivered projects documented presentably?
- Do you keep a register of delayed handovers and their causes?
- Are project funds held separately from company funds?
- Are your statements externally audited?
- Are contingent obligations disclosed in the accounts?
- Is the capital structure documented and current?
- Is land title clean and registered for every active project?
- Are permits and licences current on every active project?
- Do your projects meet the reported minimum area threshold?
Time is on your side. It won't stay that way.
We'll review where you stand and tell you whether you have a real gap before the law lands.
Book the session